November 14, 2012 10:13 am·Comments Off on La Oroya Complex Could Have New Owner By AugustViews: 58

The La Oroya smelter, located in central Peru’s Andean mountains, could have a new owner by August next year, according to daily El Comercio.

Investment bank UBS has been put in charge of a public auction to sell the smelter, as well as other assets that belonged to U.S.-owned Doe Run Peru. The process is expected to take about nine months, said Ayar Lopez, a lawyer with Right Business, the company that was appointed to administrate Doe Run Peru during the liquidation process.

“The international auction will be held approximately in August and we will have a new buyer,” he said.

Doe Run acquired the La Oroya metallurgical facility in 1997 during a privatization program during President Alberto Fujimori’s administration after the winning bidder, Industrias Peñoles of Mexico, backed out.

The complex, which was built in the 1920s, has caused serious environmental damage and public health problems in the town of La Oroya and is considered one of the most contaminated places in the world.

As part of the purchase agreement, Doe Run —which acquired the complex for $247.9mn— agreed to comply with a 10-year environmental cleanup and management plan, or PAMA. That plan was extended a number of times, more than doubling the investment required for the cleanup.

Doe Run did make improvements, completing eight of its nine environmental projects. However a lack of financing during the global financial crunch in 2009 led to the complex being shut down as the firm was unable to complete the ninth environmental project.

Creditors of the firm have opted to liquidate its assets, which also include the Cobriza copper mine, rather than allow the company to keep operating through a restructuring program.